Climate change may create price volatility in the corn market

Apr 22, 2012
Climate change may create price volatility in the corn market, say Stanford and Purdue researchers
America's No. 1 crop could see its prime growing region shift to the Canadian border or its price volatility increase sharply within 30 years. A new Stanford study points to climate change as the cause. Credit: Doug Wilson, Agricultural Research Service, USDA

By the time today's elementary schoolers graduate from college, the U.S. corn belt could be forced to move to the Canadian border to escape devastating heat waves brought on by rising global temperatures. If farmers don't move their corn north, the more frequent heat waves could lead to bigger swings in corn prices – "price volatility" – which cause spikes in food prices, farmers' incomes and the price livestock farmers and ethanol producers pay for corn.

A study published April 22 in the journal Nature Climate Change shows for the first time climate change's outsized influence on year-to-year swings in .

Researchers from Stanford and Purdue universities found that climate change's impact on corn price volatility could far outweigh the volatility caused by changing oil prices or government energy policies mandating biofuels production from corn and other crops.

"Frankly, I was surprised that climate had the largest effect of these three influences," said Noah Diffenbaugh, an assistant professor of environmental Earth system science at Stanford's School of Earth Sciences and a fellow at the Stanford Woods Institute for the Environment. "These are substantial changes in price volatility that come from relatively moderate global warming."

The study, based on economic, climatic and agricultural data and computational models, finds that even if climate change stays within the internationally recognized target limit of 3.6 degrees Fahrenheit above pre-industrial levels, the temperature changes could still make damaging much more common over the U.S. corn belt.

"Severe heat is the big hammer," Diffenbaugh said. "Even one or two degrees of global warming is likely to substantially increase heat waves that lead to low-yield years and more price volatility."

The researchers calculate that when climate change's effects are coupled with federal mandates for biofuel production, corn price volatility could increase sharply over the period from 2020 to 2040. Increasing heat waves will lead to low-yield years, and government-mandated corn sales to ethanol producers limit the market's ability to buffer against low-yield years.

"By limiting the ability of commodity markets to adjust to yield fluctuations, biofuels mandates work in exactly the wrong direction," said Thomas Hertel, a professor of agricultural economics at Purdue University who participated in the study.

"Our results suggest that energy policy decisions are likely to interact with climate change to affect corn price volatility, and that the market effect of a binding biofuel mandate is likely to intensify as the climate warms," Diffenbaugh said.

Diffenbaugh and Hertel also explored the potential of farmers to adapt to the changing climate. They found that, unless corn farmers increase their crops' heat tolerance by as much as 6 degrees Fahrenheit, the areas of high corn production would have to move northward from the current U.S. belt to near the Canadian border in order to avoid excessive heat extremes.

"Our goal was to explore the interacting influences of climate, energy markets and energy policy," said Diffenbaugh. "It is clear from our results that those policy decisions could strongly affect the impacts that has on people. And, importantly, we also identify potential opportunities for reducing those impacts through adaptation."

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markeagleone
1.4 / 5 (10) Apr 22, 2012
It amazes me that global warming is pushed into every nook and cranny possible. I find it hard to believe that they have not come out about all the facts. Fact one, for over 80% of the earth's life, the earth has been, for the most part, snow and ice free. Snow and ice have been a part since the last ice age and common sense says that that ice age is almost over. I have to believe that the planet is returning to its natural state. I think man has a small role in pushing it faster than normal, but it's on its way regardless of man. It's kind of like forest fires. Man can get them to burn before their time, but good old mother nature will set them off with a lightning strike somewhere down the road. The earth will change, with or without us. The dinosaurs walked a planet without much ice and snow, alot warmer than today. Are these scientists going to say they used too much gas and oil in their homes and cars? Get the science right, instead of going for the hype.
casualjoe
4 / 5 (4) Apr 22, 2012
I think man has a small role in pushing it faster than normal, but it's on its way regardless of man. It's kind of like forest fires. Man can get them to burn before their time, but good old mother nature will set them off with a lightning strike somewhere down the road. The earth will change, with or without us.

Regardless, we still have a responsibility to our planet. We're not just here to consume as much as we can, we don't need to continue building power plants and factories at the current rate.
Using simple maths if you take t to infinity the outcome of our current trend is pretty bleak. We're here to live and continue living through our children right?

Get the science right, instead of going for the hype.

This is good. Micro generation and urban agriculture are also good.
ryggesogn2
1.6 / 5 (13) Apr 22, 2012
Annual weather affects corn price volatility.
If Canadian climate allows corn to grow, or if corn is engineered to grow in Canada, sounds like a good thing.
The AGWites are also part of the crowd that wants have the planet to die and fret about food production.
KingDWS
5 / 5 (3) Apr 22, 2012
Um they do grow corn in Canada already. Quite tasty too.
jerryd
5 / 5 (4) Apr 22, 2012

While I completely agree that crops are going to be in trouble from GW it's far more likely to be from water shortages by no snow pack and bigger floods in the rainy season instead of temps.

The problem with Canada is once it's and Siberia's tundra's defrost, they will add far more CO2 and Methane than humans do. And that is likely the tipping point as after that happens just no way to stop it.

As for Temps corn grows quite well in Fla here, Mexico, C.A.. They only grow corn in places that can't grow much else profitably like the midwest. And little corn is grown for food but for animal feed and chemicals that isn't suitable for humans.

Since most of the corn is still available for animal or even human feed with it's extra protein, means little of the food supply is used. Big oil put out propaganda very well tocut the competition.
ryggesogn2
1 / 5 (8) Apr 22, 2012
unless corn farmers increase their crops' heat tolerance

How do corn farmers do this?
Corn farmers don't breed or hybridize corn. They buy the seed from seed companies, plant it and hope they get a crop. Just like every farmer they hope they won't get too much rain, too little rain, rain at the wrong time, army worms, hail too early, early frost, too high a yield, ....
Seed companies create their hybrids for the northern hemisphere in Hawaii and South America manually tasseling to create the hybrid.
There are so many other immediate variables to be worried about to worry about much about long term climate changes.
ryggesogn2
1 / 5 (9) Apr 22, 2012
Now if the rest of the world adopted free market polcies and protected property rights, places like Zimbabwe and Mexico could be producing all sorts of food crops.
Shootist
1 / 5 (7) Apr 22, 2012
Yes! Cheaper corn, wheat, rye and hopps = cheaper Beer and Bourbon. Warmer weather = longer growing seasons (ask the Romans, ask the Norsk).
NotParker
1.3 / 5 (14) Apr 22, 2012
Corn growers are freaking out because the biofuel subsidy is over and burning food in your car is dumb.
axemaster
4.6 / 5 (9) Apr 22, 2012
It amazes me that global warming is pushed into every nook and cranny possible.

Really? I would think the opposite - I'd be surprised to find something that wasn't affected by it. It's kinda a big, almost "global" problem, you know?

I have to believe that the planet is returning to its natural state.

Why?

Man can get them to burn before their time, but good old mother nature will set them off with a lightning strike somewhere down the road.

Really? How exactly is oil miles below the ground supposed to spontaneously come up and burn? Answer: it doesn't. It's something entirely new, and all the old, "natural" rules are worthless.

The AGWites are also part of the crowd that wants have the planet to die and fret about food production.

You must have an IQ above 170 or so, because that made no sense to me. No wait... you don't.

It's kinda sad to watch people making various wrong interpretations of the article when it pretty much spoon feeds them the answers...
NotParker
1.3 / 5 (15) Apr 22, 2012
Is the US actually warming?

Texas isn't.

http://www.mysana...smRcsqSC
ryggesogn2
1.7 / 5 (11) Apr 22, 2012
Corn growers are freaking out because the biofuel subsidy is over and burning food in your car is dumb.

There was a time not long ago when people were burning corn, actual dried field corn, in home furnaces because the price of corn was less than other fuel.
Vendicar_Decarian
4.5 / 5 (8) Apr 22, 2012
We are in an inter-galacial Mark, and would be heading into another glacial cycle in several thousand years if it were not for the buildup of CO2 in the atmosphere.

What planet are you from?

"Snow and ice have been a part since the last ice age and common sense says that that ice age is almost over." - MarkofIdoicy.

Vendicar_Decarian
4.5 / 5 (8) Apr 22, 2012
Times change. You remain chronically ignorant.

"There was a time not long ago when people were burning corn, actual dried field corn, in home furnaces because the price of corn was less than other fuel." - RyggTard

In a report tomorrow, the U.S. Department of Agriculture probably will cut its forecast of global corn reserves before this years Northern Hemisphere harvest to 122.5 million metric tons, the lowest in four years, according to a Bloomberg News survey of 14 analysts.
mememine69
1.4 / 5 (11) Apr 22, 2012
Climate blame science has done to science what abusive priests did for religion. You people are criminals.
mememine69
1 / 5 (7) Apr 22, 2012


Exaggerated science trumps any and all consensus science and its voters who have the real and final consensus, not a handful of lab coat consultants. Just remember, up until ten years ago, science was still denying the dangers of the pesticides that science gave us. Science poisoned the planet originally and made environmentalism necessary in the first place. 50 years ago science was the enemy of Rachel Carson's environmental revolution. Now you goose step to them.

NotParker
1.3 / 5 (12) Apr 22, 2012

In a report tomorrow, the U.S. Department of Agriculture probably will cut its forecast of global corn reserves before this years Northern Hemisphere harvest to 122.5 million metric tons, the lowest in four years, according to a Bloomberg News survey of 14 analysts.


"Were at a really early planting pace for corn, said Will Babler, a broker at First Capitol Risk Management Inc. in Galena, Illinois. There was just a big sell-off in corn. Youve got ethanol following."

http://www.bloomb...ing.html

Translation: Its going to be a spectacular year for corn. Those with corn in storage sold it cheap (for ethanol) because it will be a bumper crop.
Vendicar_Decarian
5 / 5 (7) Apr 23, 2012
New York is...

http://www.ncdc.n...mp;div=0

"Is the US actually warming? Texas isn't." - ParkerTard

ParkerTard Caught lying by cherry picking this time.

Vendicar_Decarian
5 / 5 (7) Apr 23, 2012
So is Ohio.

http://www.ncdc.n...mp;div=0

Minnesota is.

http://www.ncdc.n...mp;div=0

Iowa is

http://www.ncdc.n...mp;div=0

And the entire Contiguous U.S. is.

http://www.ncdc.n...mp;div=0

From Parker Tard's own reference.

NotParker
1 / 5 (8) Apr 23, 2012
New York is...


... cooling at -.35F per decade since 1998.

http://www.ncdc.n.../ny.html

Washington is cooling at -.45F per decade since 1990

http://www.ncdc.n.../wa.html

Cycles come to an end .... warming changes to cooling.
NotParker
1 / 5 (8) Apr 23, 2012
Ohio cooling at -0.75 deg F / dec since 1998

Minnesota cooling at -1.75 F / dec since 1998

Iowa cooling -1.81F / dec since 1998

US cooling -0.85 degF / Decade since 1998.

Cycles end ....

Notice Washington, Oregon and California cycle ended early - 1990

Oregon cooling -0.29 degF / Decade since 1990

California cooling -0.09 degF / Decade since 1990

rubberman
4 / 5 (8) Apr 23, 2012
Corn growers are freaking out because the biofuel subsidy is over and burning food in your car is dumb.


This is without a doubt the smartest thing you have ever typed on this forum.....probably should have quit while you were ahead, but I see you didn't. FYI... No competent person begins any measurement of anything with the most extreme instance of occurrence (temperatures from 1998), and then makes a statement of trend based on it as a starting point.....oh yeah, it's you, NVM.
ccr5Delta32
4.9 / 5 (7) Apr 23, 2012
Cult of denialism Parker

US cooling -0.85 degF / Decade since 1998.


And this is the warmest April Monday for nearly a year
NotParker
1 / 5 (7) Apr 23, 2012
Cult of denialism Parker

US cooling -0.85 degF / Decade since 1998.


And this is the warmest April Monday for nearly a year


Except for the snowy parts of the US.
ccr5Delta32
4.8 / 5 (4) Apr 23, 2012
That was meant to be humorous to illustrate the absurdity of referencing short term Weather anomalies for climate trends .Something you do regularly for example you've posted this
http://arctic-roo...area.png
to assert above average sea ice on a section of approx. 10 days while ignoring the rest of the year.
Anomalies otherwise known as weather
NotParker
1 / 5 (6) Apr 23, 2012

Anomalies otherwise known as weather


Yet 30 year rising trends in the Antarctic Sea Ice are ignored.

http://arctic.atm...ctic.png
ryggesogn2
1 / 5 (6) Apr 23, 2012
Farmers raise crops to earn a profit.
If they can earn a profit raising corn, they will.
They will raise any crop they can to earn a profit on their land.
When govts distort markets, farmers adapt to those distortions. Some may set aside acres for govt payments, others may plant all the soybeans or corn they can depending upon the latest subsidy fad leading to unintended consequences the omnipotent socialist did not see.
ccr5Delta32
4.7 / 5 (3) Apr 23, 2012
Move the goalpost to the seasonal antarctic sea ice and ignore the land mass
http://earthobser...outh.php
Here you can see sea ice come and go every year
Again if you base your conclusions on anomalies you'll have a skewed perception of reality